<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TELEPORT COMMUNICATIONS GROUP INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
TELEPORT COMMUNICATIONS GROUP INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
[LOGO]
April 10, 1998
Dear Teleport Communications Group Inc. Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend the
1998 Annual Meeting of Stockholders of Teleport Communications Group Inc.
The meeting will be held on May 13, 1998, at 1:30 p.m. eastern daylight time
("EDT") at the Villas of Grand Cypress, Executive Meeting Center, One North
Jacaranda, Orlando, Florida.
I urge you to attend the meeting if at all possible, since it provides an
opportunity to discuss our company with its management, in person. If you cannot
attend in person, please vote your preference on the enclosed proxy card and
return it promptly.
It is important that your shares be voted, whether in person or by proxy.
Your participation in our company's business through our annual meetings is an
essential part of our company's governance.
I look forward to seeing you.
Sincerely,
[LOGO]
Robert Annunziata
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
TELEPORT COMMUNICATIONS GROUP INC.
ONE TELEPORT DRIVE
STATEN ISLAND, NEW YORK 10311
NOTICE OF ANNUAL STOCKHOLDERS MEETING
To Our Stockholders:
The annual meeting of the stockholders of Teleport Communications Group Inc.
(the "Company" or "TCG") will be held on May 13, 1998 at 1:30 p.m., EDT, at the
Villas of Grand Cypress, Executive Meeting Center, One North Jacaranda, Orlando,
Florida. The items of business to be transacted at this meeting are as follows:
1. To elect a Board of Directors for the ensuing year;
2. To act upon a proposal to ratify the appointment of Deloitte & Touche
LLP as the Company's independent certified public accountants for the
fiscal year ending December 31, 1998; and
3. To transact such other business as may properly come before the
meeting.
The Board of Directors has specified March 23, 1998 at the close of business
as the record date for the purposes of determining the stockholders who are
entitled to receive notice and to vote at the annual meeting. The Proxy
Statement for the Annual Meeting is set forth on the following pages.
By order of the Board of Directors
[LOGO]
John W. Thomson
VICE PRESIDENT AND SECRETARY
Dated and mailed April 10, 1998
IMPORTANT
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING OF
STOCKHOLDERS. ACCORDINGLY, YOU ARE URGED TO PLEASE COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
IF YOU SO CHOOSE, YOU MAY VOTE YOUR SHARES IN PERSON AT THE ANNUAL MEETING.
<PAGE>
TELEPORT COMMUNICATIONS GROUP INC.
ONE TELEPORT DRIVE
STATEN ISLAND, NEW YORK 10311
PROXY STATEMENT
This Proxy Statement and the accompanying Proxy are being mailed April 10,
1998 to holders of Common Stock of Teleport Communications Group Inc., a
Delaware corporation (the "Company" or "TCG"), in connection with the
solicitation of the Proxies by the Board of Directors for the Company's 1998
Annual Meeting to be held on May 13, 1998 (the "Meeting") and at any adjournment
or postponements thereof. Proxies are solicited to provide all stockholders of
the Company with the opportunity to vote. Shares may be voted at the Meeting
only if the stockholder is present in person or represented by a Proxy.
The cost of preparing, mailing and soliciting Proxies will be borne by the
Company. Arrangements have been made with brokerage houses, custodians, nominees
and other fiduciaries to send proxy material to their principals, and the
Company will reimburse them for the expenses.
Stockholders of record at the close of business on March 23, 1998 are
entitled to receive notice of and to vote at the Meeting. The Company has two
classes of capital stock outstanding: Class A Common Stock, par value $.01 per
share, and Class B Common Stock, par value $.01 per share. Each share of Class A
Common Stock outstanding on the record date is entitled to one vote, and each
share of Class B Common Stock outstanding on the record date is entitled to ten
votes. As of the close of business on March 23, 1998 there were outstanding and
entitled to vote 61,590,745 shares of Class A Common Stock and 113,489,040
shares of Class B Common Stock.
All corporate actions to be taken by vote of the stockholders require
approval of a majority of the votes cast by the stockholders of both Class A
Common Stock and Class B Common Stock present in person or by Proxy at the
Meeting, voting together as a single class. Stockholders may cast their vote in
favor to the election of directors or may withhold their vote for one or more
nominees. Stockholders may cast their votes in favor of or against the
ratification of the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the year ended December 31, 1998, or stockholders may
abstain from voting on this proposal. An abstention on such proposal will have
the effect of a negative vote because approval of the proposal requires a
majority of the votes cast to be cast affirmatively for the proposal. Broker
non-votes will be disregarded for voting purposes and, therefore, will have no
effect on the outcome of the vote of stockholders.
The stockholder giving the Proxy may revoke it by (i) delivering a written
notice of revocation to the Secretary of the Company at One Teleport Drive,
Staten Island, New York 10311 any time before the commencement of the Meeting or
any adjournment or postponement thereof; (ii) attending the Meeting and voting
in person; or (iii) executing and delivering to the Secretary of the Company a
Proxy bearing a time and date later than that of the Proxy to be revoked.
Receipt of revocation of the Proxy after the Meeting will not affect any vote
previously taken at the Meeting.
This Meeting has been called for the purposes set forth in the Notice of
Annual Meeting (the "Notice") to which this Proxy Statement is appended. The
Board of Directors does not anticipate that matters other than those described
in the Notice will be brought before the Meeting for stockholders action, but if
any other matters properly come before the Meeting, votes thereon will be cast
by the persons named in the enclosed Proxy at their discretion.
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ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
Thirteen directors are to be elected at the Meeting, each to serve for a
term of one year and thereafter until their successors are duly elected and
qualified. All of the nominees are presently directors of the Company.
Unless authority to vote is withheld, the enclosed Proxy will be voted for
the election of the nominees as directors of the Company. If any one or more of
the nominees becomes unavailable for election, which is not anticipated, the
holders of the Proxies, acting pursuant to the authority granted by the Proxy,
will vote for such person or persons as may be designated by the Board of
Directors.
The name of each nominee, the year each director first joined the Board, and
the nominees' principal occupations and ages are set forth below.
DIRECTORS OF TCG
JOHN R. ALCHIN, 49, has been a director since November 1997. Mr. Alchin is
the Senior Vice President and Treasurer of Comcast Corporation ("Comcast"). In
this capacity, he manages Comcast's capital formation activities, including
equity and debt placements in domestic and overseas markets. He also oversees
treasury management functions. Prior to joining Comcast in January 1990, Mr.
Alchin worked with Toronto Dominion Bank, most recently as Managing Director,
responsible for the Bank's Merchant Banking Group. He was active in founding the
Bank's U.S. Communications Finance Group and worked closely with the cable
television industry.
ROBERT ANNUNZIATA, age 49, has been Chairman of the Board since 1990 and a
director since 1984. See "Executive Officers" for a description of Mr.
Annunziata's business experience.
JOHN R. DILLON, age 56, has been a director since December 1991. Mr. Dillon
had been Senior Vice President and Chief Financial Officer of Cox Enterprises,
Inc. ("CEI") since 1990 and retired on December 31, 1996. He continues to serve
as a consultant to CEI and joined Cravey, Green & Wahlen, a private equity firm,
as Managing Director in February 1997. He is also a director of Cox
Communications, Inc. ("Cox").
GERALD W. GAINES, age 41, has been a director since November 1994. Mr.
Gaines has been Senior Vice President of Telephony Services for
Tele-Communications, Inc. ("TCI") since 1994, and represents TCI in its joint
venture with Sprint, Cox and Comcast. Prior to that, he had been founder and
President of GCG Inc., a management services firm serving the telecommunications
industry since 1991. From 1986 to 1991, Mr. Gaines held various executive
positions with U S WEST, most recently serving as President and Chief Executive
Officer for U S WEST Service Link, a service bureau providing operator and
computerized validation services. He also serves on the Board of Directors of
the Five Points Media Center.
JIMMY W. HAYES, age 45, has been a director since August 1996. He joined CEI
in 1980 as Accounting Manager. He was promoted in May 1981 to Assistant
Controller in December of that year. He was named a corporate officer in
December 1982, and promoted to Vice President of Finance of Cox in August 1989.
He was promoted to Senior Vice President of Finance and Chief Financial Officer
of Cox in January 1992. Prior to joining CEI, Mr. Hayes was an Audit Manager
with Price Waterhouse & Company in Atlanta.
GARY S. HOWARD, age 47, has been a director since April 1998. He is
President and Chief Executive Officer of TCI Ventures Group and Chairman and
Chief Executive Officer of United Video Satellite Group and TCI Satellite
Entertainment, Inc.
JAMES BRUCE LLEWELLYN, age 70, has been a director since June 1996. He has
been the Chairman of the Board and principal stockholder of the Philadelphia
Coca-Cola Bottling Company since 1985. He was the principal stockholder and
Chairman of the ABC television network affiliate in Buffalo, New York. He served
as the Chairman of Garden State Cablevision, Inc. and has been a partner in the
Washington, D.C.
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law firm of Dickstein, Shapiro & Morin. He serves on the Board of Directors of
Coors Brewing Company and Essence Communications, Inc.
JAMES O. ROBBINS, age 55, has been a director since April 1996. Mr. Robbins
has served as President and Chief Executive Officer of Cox since May 1994. Prior
to that, Mr. Robbins had been President of Cox since 1985. Mr. Robbins has been
a director of Cox since May 1994. Mr. Robbins is a member of the Executive
Committee of the National Cable Television Association. Mr. Robbins also serves
as a director to TeleWest Communications plc and NCR Corporation and is a
representative on the Partnership Board of Sprint Spectrum Holding Company,
L.P., the general partner of Sprint Spectrum, L.P.
C.B. ROGERS, JR., age 68, has been a director since June 1996. He has been
Chairman of Equifax Inc. since 1992. He was Chief Executive Officer of Equifax
Inc. from 1989 to December 1995. He is Chairman of the Board of Directors and
the Executive Committee of Equifax Inc. Mr. Rogers is a former Senior Vice
President of International Business Machines Corporation ("IBM") where he was
employed for 33 years before joining Equifax Inc. in 1987. He also serves on the
Board of Directors of Sears, Roebuck & Co., Briggs & Stratton Corporation,
Oxford Industries, Inc. and Morgan Stanley, Dean Witter, Discover & Co.
LARRY E. ROMRELL, age 58, has been a director since April 1996. Prior to
that time, he was director of TCG from November 1992 to October 1995. Mr.
Romrell has been Executive Vice President of TCI since January 1994 and
President of TCI Technology Ventures since September 1994. Prior to that, he had
been Senior Vice President of TCI Communications Inc., ("TCIC") from 1991 to
October 1994. Mr. Romrell previously held various executive positions with
WestMarc Communications, Inc., a subsidiary of TCI.
BERNARD W. SCHOTTERS, age 53, has been a director since August 1996. He was
appointed Senior Vice President--Finance and Treasurer of TCIC in October 1991
and Executive Vice President--Finance and Treasurer as of January 1, 1998.
Previously he served as TCI's Vice President--Finance. Mr. Schotters is
currently a member of the National Association of Securities Dealers 1994 Issuer
Affairs Committee and functions in a consultative capacity to the National Cable
Television Association. Prior to joining TCI in 1983, Mr. Schotters was Vice
President of Wells Fargo Bank where he was involved in commercial lending
activities.
LAWRENCE S. SMITH, age 50, has been a director since May 1993. Mr. Smith has
been Executive Vice President of Comcast since January 1996. Prior to that, he
had been Senior Vice President of Accounting and Administration for Comcast for
more than five years. He joined Comcast in 1988 with responsibility for
financial administration and corporate accounting. He previously served as Chief
Financial Officer of Advanta Corp., a financial services firm, and was a tax
partner in the Philadelphia office of Arthur Andersen & Co., with which he was
affiliated for 18 years. Mr. Smith serves on several corporate boards including
Comcast U.K. Cable Partners Limited, Sprint Spectrum Holding Company, L.P., E!
Entertainment Television, Inc. and QVC, Inc.
DAVID M. WOODROW, age 52, has been a director since November 1992. Mr.
Woodrow has been Senior Vice President of Broadband Services for Cox since 1994.
Prior to that, he had been Senior Vice President of Operations for Cox since
1989. Mr. Woodrow is a director of the Cellular Telephone Industry Association
and At Home Corporation.
EXECUTIVE OFFICERS
ROBERT ANNUNZIATA, age 49, has been Chairman of the Board since 1990 and
President and Chief Executive Officer since 1985. Prior to that, Mr. Annunziata
had been Senior Vice President and Chief Operating Officer since 1983. He has
been a director of TCG since 1984. He has 30 years of experience in the
telecommunications industry, including 17 years in a variety of operations and
marketing positions with AT&T. He has served as President of the World Teleport
Association ("WTA") from 1987 to 1991 and remains a WTA director. He currently
serves on the Board of Directors of the YMCA of Greater New
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York. Formerly, he served on the New York State Governor's Advisory Board on
Telecommunications and the New York City Mayor's Alliance for International
Business.
ROBERT C. ATKINSON, age 46, has been Senior Vice President--Legal,
Regulatory and External Affairs since February 1990. Prior to that he had been
Vice President--Regulatory and External Affairs since 1985. Prior to joining
TCG, Mr. Atkinson held various business development, regulatory and government
relations positions at ITT World Communications Inc., Satellite Business
Systems, GTE Sprint and RCA Global Communications, Inc. He was a founder and
first President of the Association for Local Telecommunications Services, the
CLEC trade association.
MARSHA GEWIRTZMAN, age 47, has been Senior Vice President--People Services
since October 1997, having previously served as Vice President--People Services.
She joined TCG as Vice President--Sales Operations in February 1996. Prior to
joining TCG, she held various senior management and executive positions over a
period of 8 years with Tiffany & Co. She also spent 15 years with AT&T in a
variety of marketing, sales, management and planning positions. Ms. Gewirtzman
serves on the Board of Directors of the Business School of the College of
William & Mary.
JOEL D. GROSS, age 43, has been Senior Vice President--Corporate Development
since February 1993. Prior to that, he had been Vice President and Senior
Securities Analyst--Telecommunications for Donaldson, Lufkin & Jenrette
Securities Corporation since 1987 and Vice President and Senior Securities
Analyst--Telecommunications for Dean Witter since 1985. Prior to that, Mr. Gross
held a variety of management positions at AT&T spanning 8 years.
ALF T. HANSEN, age 55, was appointed Senior Vice President--Emerging Markets
in October 1997. Prior to that, he had been Senior Vice President--National
Operations since January 1993, and prior to that, he had been Vice
President--National Operations since March 1990 and Vice President--Engineering
and Operations for TCG's New York/New Jersey metropolitan area since joining TCG
in 1989. Prior to joining TCG, Mr. Hansen worked for AT&T where he had
assignments in Operations, Engineering, Sales and Public Relations. From 1983 to
1988, he managed AT&T's Long Distance Switched Network in New England and New
York. In 1988, he was AT&T's Project Manager responsible for the implementation
of the Tariff 12 Networks.
J. CURT HOCKEMEIER, age 49, was appointed Senior Vice President--Network
Operations in October 1997. Prior to that, he had been Senior Vice
President--Network Services. Mr. Hockemeier joined TCG in January 1993. Prior to
that, he had been Vice President and General Manager of Cox Cable Oklahoma City
since 1983. He joined Cox Cable in Atlanta in 1980 as Director of Corporate
Advertising. Mr. Hockemeier was employed by General Electric Co. for 9 years in
a variety of marketing communications assignments prior to joining Cox Cable.
MARVIN L. LINDSEY, age 57, was appointed Senior Vice President--MIS in
October 1997. Prior to that, he had been Senior Vice President--Engineering and
MIS since December 1993. Prior to joining TCG, Mr. Lindsey was an independent
telecommunications consultant for various large international telecommunications
companies since July 1991. Mr. Lindsey was Service Vice President of AT&T's
Business Communications organization from April 1987 to July 1991 and worked
more than 28 years in various technical and operations positions with AT&T.
STUART A. MENCHER, age 58, was appointed Senior Vice President--Sales and
Marketing in October 1997. Prior to that, he had been Senior Vice
President--National Sales and Marketing since February 1994. Prior to that, he
had been Senior Vice President--New York Operations since February 1993 and Vice
President and General Manager of Teleport Communications New York ("TCNY") since
June 1992. From June 1991 until May 1992, Mr. Mencher worked as an independent
consultant in the international telecommunications industry. From March 1987 to
January 1990, Mr. Mencher served as a Senior Vice President of MCI
Telecommunications Corp., primarily responsible for sales and marketing, and,
from February 1990 to May 1991, he served as Senior Vice President of the U.S.
Distribution Division
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of Motorola/Codex Corp. Prior to joining MCI, Mr. Mencher served in a variety of
senior sales and marketing executive positions with AT&T Information Systems
following almost sixteen years of sales, marketing and management experience
with IBM's Data Processing Division.
JOHN A. SCARPATI, age 46, has been Senior Vice President and Chief Financial
Officer since March 1990. He has been the senior financial officer of TCG since
its inception. Prior to joining TCG, he was Vice President and manager for
Merrill Lynch & Co., primarily responsible for performing due diligence reviews
for companies being considered for acquisition by Merrill Lynch & Co. or its
subsidiaries. His assignments included Merrill Lynch & Co.'s investment in TCG
and Merrill Lynch & Co.'s entry into the real estate brokerage and banking
industries. Mr. Scarpati is a Certified Public Accountant and is a member of the
American Institute of Certified Public Accountants and the New York State
Society of Certified Public Accountants.
KENNETH A. SHULMAN, age 44, has been Senior Vice President--Technology since
August 1995. Prior to that, he had been Vice President of Applied Research and
Development since February 1994, Vice President of Technology and Network
Planning since October 1991, Director, Engineering and Technology since June
1990 and Director, Research and Technology since November 1989. Prior to joining
TCG in 1987, Mr. Shulman held positions as Director--Systems Engineering at MCI
International, as District Manager--Integrated Network Evolution Planning at
Bell Communications Research and as Supervisor-- Switching Systems Engineering
at Bell Laboratories. Mr. Shulman serves on the Board of Directors of WarpSpeed
Communications, Inc. and the Alliance for Telecommunications Industry Solutions
("ATIS") and is a member of the FCC's North American Numbering Council.
MARIA TERRANOVA-EVANS, age 42, has been Vice President and Controller since
February 1992. Ms. Evans has held various managerial and executive financial
positions since joining TCG in September 1984 including accounting Manager,
Controller, and accounting Director/Controller. She is also a Certified Public
Accountant.
WAYNE G. FOX, age 42, has been Vice President and Treasurer since June 1995.
Prior to that, he had been Vice President--Corporate Ventures since January 1993
and Managing Director of Corporate Ventures since November 1992. Mr. Fox was a
director of TCG from April 1991 to November 1992. Prior to joining TCG, he had
been a Vice President and Director in the Mergers & Acquisitions Group for
Merrill Lynch Capital Markets.
JOHN W. THOMSON, age 49, has been Vice President and Secretary since June
1984. Mr. Thomson also served as General Counsel of TCG from June 1984 to
February 1996, and as Senior Counsel for Merrill Lynch & Co. from 1981 to 1988.
W. TERRELL WINGFIELD, JR., age 45, has been Vice President and General
Counsel since March 1996. From March 1994 to February 1996, Mr. Wingfield served
as Regional Vice President--Central Region Operations, and from January 1993 to
March 1994 as Counsel--Affiliate Services. Prior to that, Mr. Wingfield had been
Senior Counsel of CEI since 1989.
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BOARD AND COMMITTEE MEETINGS
During the year ended December 31, 1997, the Company's Board of Directors
met six times. All directors attended at least 75% of the meetings of the Board
of Directors and of the Committees on which they served that they were eligible
to attend, except Larry E. Romrell and two former directors, Brendan R. Clouston
and Brian L. Roberts.
The Board of Directors has four Committees: the Audit Committee, the
Compensation and Benefits Committee (the "Compensation Committee"), the
Executive Committee and the Finance Committee. The Audit Committee's current
members are Messrs. Schotters (Chairman), Hayes and Smith. The Audit Committee
held three meetings during 1997. The Audit Committee recommends to the full
Board of Directors the selection of independent auditors, reviews the activities
and reports of the independent auditors and monitors the independent audit
function and controls of TCG.
The Compensation Committee's current members are Messrs. Dillon (Chairman),
Gaines, Llewellyn and Smith. The Compensation Committee held five meetings
during 1997. The Compensation Committee determines the compensation packages of
the five most highly paid executives of TCG, reviews other compensation matters
periodically and authorizes the issuance of stock options and other long-term
incentive grants pursuant to approved plans.
The Executive Committee's current members are Messrs. Annunziata (Chairman),
Smith, Gaines, Robbins and Rogers. The Executive Committee held one meeting
during 1997. The Executive Committee reviews and approves, within specific
dollar limits, merger and acquisition proposals, capital spending above approved
budget amounts and issuance of debt. The Executive Committee also approves TCG's
expansion into new markets, reviews the annual budget submitted by TCG's
management and submits a budget proposal to the full Board of Directors for
ratification.
The Finance Committee's current members are Messrs. Gaines (Chairman),
Alchin and Hayes. The Finance Committee held three meetings during 1997. The
Finance Committee reviews the TCG financing plans and investment policy.
COMPENSATION OF DIRECTORS
No director receives any retainer or compensation for serving as a director
except for TCG's two independent directors ("the Independent Directors"),
currently Messrs. Llewellyn and Rogers. Each Independent Director is entitled to
a fee of $6,250 for each calendar quarter he serves as a director and the
reimbursement of all reasonable expenses related to attendance at meetings of
the Board of Directors or any Committee thereof. Fifty percent of the quarterly
fee is payable in cash with the remaining fifty percent payable in shares of TCG
Class A Common Stock pursuant to the terms of the Teleport Communications Group
Inc. Directors Stock Plan. In addition, each Independent Director is paid $1,000
in cash for each meeting of the Board of Directors which the Independent
Director attends in person and $250 in cash for each calendar quarter during
which the Independent Director serves as the Chairman of a Committee of the
Board of Directors.
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REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
COMMITTEE'S COMPENSATION PHILOSOPHY
The Compensation Committee of the Board of Directors of the Company (the
"Committee") is responsible for the establishment, administration and review of
executive compensation programs and policies of the Company. The overriding goal
and philosophy of the Committee is to provide an executive compensation package
designed to increase stockholder value, largely through the use of long-term
equity-based incentives which align the financial interests of the Company's
executives with those of the Company's stockholders. Based on this philosophy,
the Committee has established the executive compensation policy described below.
This policy has guided the Committee in making executive compensation decisions
for 1997.
In formulating specific executive compensation programs and establishing
compensation levels, the Committee reviews competitive compensation data
provided by a national, executive compensation consulting firm. This data is
based on a survey conducted by the consulting firm of companies with which TCG
competes for business.
EXECUTIVE COMPENSATION POLICY
The executive compensation policy of the Committee is comprised of two
components: 1) annual compensation, consisting of base salary and annual
performance bonus; and 2) long-term incentives, consisting of equity-based
awards. In keeping with the Committee's philosophy of focusing on stockholder
value, the annual component of the executive's compensation is targeted at the
50th percentile of the competitive data for positions of similar responsibility.
The long-term component of the executive's package is targeted to bring the
executive's total compensation up to the 75th percentile of the competitive
data, provided the Company demonstrates similar performance characteristics.
ANNUAL BASE SALARY AND BONUSES. Base salary is designed to provide
meaningful levels of compensation to executives, while helping the Company
manage its fixed costs. The Committee determines the salary of the Chief
Executive Officer, and reviews the recommendations of the Chief Executive
Officer in determining the base salaries of other executive officers, including
the Named Executive Officers. Salaries are determined annually, and are based on
the Committee's review of job scope and responsibilities, length of service,
individual and Company-wide performance, competitive rates for similar
positions, as indicated by the competitive data, and subjective factors.
Annual bonuses are awarded on the basis of performance as compared to
pre-established, performance goals determined by the Committee. Pursuant to the
employment agreement with the Chief Executive Officer, the Chief Executive
Officer is entitled to an annual bonus of 60% of base salary if the target
performance goals established by the Committee are met. Pursuant to employment
agreements with each of the Senior Vice Presidents of the Company, which include
the other Named Executive Officers, each of the Senior Vice Presidents is
entitled to an annual bonus of 40% of base salary if the target performance
goals are met. For fiscal year 1997, the performance goals established by the
Committee were based on the Company's financial budget, as established by the
Board, as well as subjective judgment regarding the Company's performance
compared to the general industry and competitors. In the discretion of the
Committee, an executive's annual bonus may be paid in the form of an award of
Class A Common Stock under the Company's Restricted Stock and Bonus Plan.
LONG-TERM INCENTIVES. Long-term incentives are generally provided to
executive officers through an annual grant of stock option awards under the
Company's 1993 Stock Option Plan (the "Stock Option Plan"). Awards under the
Stock Option Plan provide compensation to executives based on the appreciation
in the value of the Company's stock over the exercise price established under
the option award.
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Based on the Committees's review of the competitive data and the Company's
performance in 1997, annual option awards were made to executive officers in
November of 1997 consistent with the Committee's executive compensation policy.
These options have a term of ten years and an exercise price per share equal to
the fair market value of a share of Class A Common Stock as of the date of
grant, or $46.98. To encourage the continued employment of executive officers,
these options will vest 25% per year beginning January 1, 1998, provided the
executive remains employed with the Company. In addition, in October of 1997,
executive officers received option awards pursuant to the Milestone Award
Program under which all employees of the Company employed as of October 31, 1997
received an option award for 50 shares of Class A Common Stock in recognition of
the Company's reaching a monthly sales revenue target of $50 million. Awards
under the Milestone Award Program were issued at an exercise price per share
equal to the fair market value of a share of Class A Common Stock as of the date
of grant , or $49.00. These options have a term of ten years and will vest on
October 31, 1999, provided the executive remains employed with the Company as of
that date.
CHIEF EXECUTIVE OFFICER COMPENSATION
The executive compensation policy described above was applied in determining
the base salary, annual bonus and long-term incentive compensation paid to
Robert Annunziata, the Company's Chairman, President and Chief Executive Officer
for 1997. In 1997, Mr. Annunziata's base salary was $370,000. Based on the
performance goals established by the Committee for revenue growth and
profitability, and the Company's financial and operating performance as compared
to general industry and the Company's competitors, Mr. Annunziata was awarded an
annual bonus for 1997 of $650,000. This bonus was payable 50% in cash and 50% in
a grant of restricted shares of Class A Common Stock under the Restricted Stock
and Bonus Plan valued at the average trading value of the stock on November 19,
1997. The cash bonus and restricted stock award were paid to Mr. Annunziata on
February 1, 1998. The restricted stock award will become 100% vested on January
1, 2000, provided Mr. Annunziata remains employed by the Company as of that
date. In continuation of the Committee's policy of having the financial
interests of the Company's executives aligned with those of the Company's
stockholders, Mr. Annunziata was awarded an annual long-term incentive
compensation for 1997 in the form of options to purchase 100,000 shares of Class
A Common Stock with terms identical to those issued to other executive officers
and described above. Mr. Annunziata was also a recipient of an option for 50
shares of Class A Common Stock under the Milestone Award Program.
TAX DEDUCTIBILITY CONSIDERATIONS
Section 162(m) of the Internal Revenue Code limits the annual deduction the
Company may take with respect to the compensation paid to each Named Executive
Officer to $1 million. Performance-based compensation meeting certain
requirements of Section 162(m) and the regulations issued thereunder are
excluded from the annual $1 million deductibility limit. Thus far, no Named
Executive Officer has received taxable compensation that has exceeded the
deductibility limit. The Committee intends to preserve the deductibility of
compensation under Section 162(m) by developing performance-based compensation
arrangements which will satisfy the requirements of Section 162(m) so that
compensation paid thereunder will not be subject to the annual deducibility
limit.
John R. Dillon
Gerald W. Gaines
James Bruce Llewellyn
Lawrence S. Smith
8
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's Class A Common Stock, for the period commencing on June 27, 1996, the
date of the Company's initial public offering, and ending on December 31, 1997,
with that of the NASDAQ Composite Index and an index of six peer companies in
the competitive local exchange carrier industry selected by the Company
(assuming the investment of $100 in each vehicle on June 27, 1996, and the
reinvestment of all dividends on a quarterly basis). The stock price performance
shown on the graph below is not necessarily indicative of future price
performance.
[LOGO]
<TABLE>
<CAPTION>
6/27/96 12/31/96 12/31/97
<S> <C> <C> <C>
TELEPORT COMMUNICATIONS GRP INC CL A 100 173.05 311.35
PEER GROUP INDEX 100 94.48 115.80
NASDAQ MARKET INDEX 100 107.59 131.61
</TABLE>
Companies in the Peer Group are as follows: American Communications
Services, Inc., GST Telecommunications, Inc., ICG Communications, Inc.,
Intermedia Communications, Inc., WorldCom, Inc. ("WorldCom") and McLeodUSA
Incorporated. The Peer Group used in last year's performance graph consisted of
American Communications Services, Inc., Brooks Fiber Properties, Inc. ("Brooks
Fiber"), GST Telecommunications, Inc., ICG Communications, Inc., Intermedia
Communications, Inc., MFS Communications, Inc. ("MFS") and McLeodUSA
Incorporated. In 1997, WorldCom acquired both Brooks Fiber and MFS.
Consequently, Brooks Fiber and MFS are not included in this year's Peer Group,
and WorldCom is included in the Peer Group.
9
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation of TCG's President and Chief
Executive Officer and each of the four remaining most highly compensated
executive officers (the "Named Executive Officers") for all services rendered to
TCG in the fiscal years ended December 31, 1995, December 31, 1996 and December
31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------------------
<S> <C> <C> <C> <C> <C> <C>
ANNUAL COMPENSATION RESTRICTED # SECURITIES
----------------------------------- STOCK UNDERLYING ALL OTHER
NAME AND POSITION FISCAL YEAR SALARY BONUS AWARDS OPTIONS COMPENSATION(2)
- ----------------------------------------- ------------- --------- --------- ----------- ------------- -----------------
Robert Annunziata........................ 1997 $ 370,200 $ 325,000(1) $ 375,227(1) 100,050 $ 45,265
President, Chief Executive 1996 300,000 520,000 -- 191,295 28,917
Officer and Chief Operating 1995 240,000 185,580 -- -- 27,879
Officer
John A. Scarpati......................... 1997 225,583 150,000 -- 55,050 32,535
Senior Vice President and 1996 175,660 273,000 -- 97,955 21,653
Chief Financial Officer 1995 159,931 115,020 -- -- 20,088
Joel D. Gross............................ 1997 192,667 110,000 -- 24,550 30,188
Senior Vice President 1996 165,413 153,000 -- 39,555 10,791
1995 147,047 95,000 -- -- 9,141
Alf T. Hansen............................ 1997 188,250 140,000 -- 21,050 19,430
Senior Vice President 1996 167,383 91,000 -- 47,120 14,741
1995 148,462 95,250 -- -- 13,168
Stuart A. Mencher........................ 1997 188,083 121,000 -- 28,050 15,936
Senior Vice President 1996 165,367 133,000 -- 44,598 12,059
1995 146,284 96,200 -- -- 10,337
</TABLE>
- ------------------------
(1) Represents 6,723 shares of restricted stock awarded to Mr. Annunziata on
February 1, 1998 as part of his annual bonus for 1997. The aggregate value
of these awards shown above is based on a price of $55.8125 per share, the
closing price of Class A Common Stock on January 30, 1998, the last business
day preceding the date of the award. These shares of restricted stock vest
January 1, 2000, provided he remains employed as of that date.
(2) Includes amounts contributed by TCG to the Retirement Savings Plan, the
Make-Up Plan and the Basic and Supplemental Group Life Insurance Plans for
each Named Executive Officer as stated below:
<TABLE>
<CAPTION>
SAVINGS MAKE-UP GROUP LIFE
PLAN PLAN PLAN
----------- ----------- -------------
<S> <C> <C> <C> <C>
Mr. Annunziata........................................ 1997 $ 7,100 $ 36,536 $ 1,629
1996 6,750 20,545 1,622
1995 6,750 19,507 1,622
Mr. Scarpati.......................................... 1997 8,500 23,176 859
1996 8,063 12,731 859
1995 8,063 11,521 504
Mr. Gross............................................. 1997 4,300 25,459 429
1996 4,125 6,360 306
1995 4,125 4,710 306
Mr. Hansen............................................ 1997 5,700 11,819 1,911
1996 5,438 8,249 1,054
1995 5,438 6,676 1,054
Mr. Mencher........................................... 1997 4,300 9,732 1,904
1996 4,125 6,622 1,312
1995 4,125 4,900 1,312
</TABLE>
10
<PAGE>
The table below sets forth information concerning stock option grants made
in the fiscal year ending December 31, 1997 to the Named Executive Officers:
OPTION GRANTS IN 1997 FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------- VALUE AT ASSUMED
# ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS EXERCISE FOR OPTION TERM
OPTIONS GRANTED TO PRICE PER EXPIRATION --------------------------
NAME GRANTED(1) EMPLOYEES SHARE DATE 5%(2) 10%(2)
- ----------------------------------------- ----------- ------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert Annunziata........................ 50 .03% $ 49.00 10/31/07 $ 1,541 $ 3,905
100,000 6.48 46.98 11/19/07 2,954,547 7,487,402
John A. Scarpati......................... 50 .03 49.00 10/31/07 1,541 3,905
55,000 3.56 46.98 11/19/07 1,625,001 4,118,071
Joel D. Gross............................ 50 .03 49.00 10/31/07 1,541 3,905
24,500 1.59 46.98 11/19/07 723,864 1,834,414
Alf T. Hansen............................ 50 .03 49.00 10/31/07 1,541 3,905
21,000 1.36 46.98 11/19/07 620,455 1,572,354
Stuart A. Mencher........................ 50 .03 49.00 10/31/07 1,541 3,905
28,000 1.81 46.98 11/19/07 827,273 2,096,473
</TABLE>
- ------------------------
(1) All options are Incentive Stock Options under section 422 of the Internal
Revenue Code to the extent allowable and expire 10 years from date of grant.
The 50 options which expire on October 31, 2007 vest 100% on October 31,
1999. The remaining options, which expire on November 19, 2007, vest 25% per
year beginning January 1, 1998.
(2) The potential realizable value portion of the foregoing table illustrates
the gain that might be realized upon the exercise of the options immediately
prior to the expiration of their term, assuming the specified compounded
rates of appreciation of TCG's Common Stock over the term of the option.
Actual gains, if any, on the stock option exercises are dependent on the
future performance of the Common Stock, overall market conditions, as well
as the options holders' continued employment through the vesting period. The
amounts reflected in this table may not necessarily be achieved.
AGGREGATED OPTION/SAR EXERCISES IN 1997 FISCAL YEAR
AND 1997 FISCAL YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT FISCAL YEAR END IN-THE-MONEY OPTIONS AT
ACQUIRED VALUE EXERCISABLE/ FISCAL YEAR END
NAME ON EXERCISE REALIZED UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------ ----------- --------- -------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert Annunziata............. -- -- 223,309 347,172 $ 10,714,366 $ 10,031,773
John A Scarpati............... -- -- 79,753 172,943 3,826,549 4,796,835
Alf T. Hansen................. -- -- 54,232 81,728 2,602,051 2,525,743
Joel D. Gross................. -- -- 39,877 74,074 1,913,298 2,095,539
Stuart A. Mencher............. -- -- 41,472 83,016 1,989,827 2,332,754
</TABLE>
11
<PAGE>
EMPLOYMENT CONTRACTS, SEVERANCE AGREEMENTS
AND CHANGE OF CONTROL AGREEMENTS
Robert Annunziata has entered into an employment agreement with TCG which
expires December 31, 2000. The agreement provides that Mr. Annunziata will be
employed as Chairman of the Board of Directors, President and Chief Executive
Officer of TCG. The agreement establishes a base salary to be paid to Mr.
Annunziata each year which is subject to annual adjustment by the Compensation
Committee and increased at least 5% per year. In addition, he is entitled to
annual bonuses in the range of 0% to 90% of his base salary, subject to the
attainment of certain performance objectives. The amount of the bonus is
determined at the discretion of the Compensation Committee. If the annual goals
set by the Compensation Committee are achieved, the target bonus is 60% of Mr.
Annunziata's base salary. If TCG terminates Mr. Annunziata's employment without
Cause or if Mr. Annunziata terminates his employment for Good Reason or within
six months of a Change in Control, then Mr. Annunziata is entitled to receive:
(i) the continued payment of his base salary, plus an annual bonus equal to no
less than 60% of his base salary, for a period of 24 months, (ii) immediate and
full vesting of all forms of deferred, contingent long-term compensation, (iii)
the options vested under the terms of his stock option award as of the
termination date, and (iv) the continuance of all benefits and perquisites for
24 months, or if earlier, until the date Mr. Annunziata commences other
employment providing comparable benefits. With certain exceptions, a Change in
Control is a direct or indirect transfer of 50% or more of the beneficial
ownership of the capital stock of TCG in one or more transactions to any entity
other than any of TCI, CEI, Comcast or Continental and their respective
controlled subsidiaries. Mr. Annunziata may be terminated for Cause if he
materially breaches his employment agreement by acting or willfully failing to
act with results that are materially and demonstrably injurious to the business
of TCG. Mr. Annunziata may terminate his employment for Good Reason if (i)
without his prior written consent, there is a material reduction in his
functions, duties and responsibilities as Chairman of the Board of Directors,
President and Chief Executive Officer, (ii) without his consent, his office is
relocated outside the Northeast Corridor or (iii) there is a material breach of
his employment agreement by TCG. Mr. Annunziata has agreed not to compete with
TCG for the term of his employment with TCG and for an additional period of two
years thereafter in the local telecommunications business.
Each of the other Named Executive Officers also has entered into an
employment agreement with TCG. The terms of each of these four agreements are
substantially identical. The term of the employment agreement of Mr. Scarpati
expires on December 31, 2000. The term of the employment agreement of Mr.
Atkinson expires on December 31, 1998. Mr. Gross' employment agreement expires
June 30, 1998, Mr. Hansen's employment agreement expires December 31, 1999 and
Mr. Mencher's agreement expires on December 31, 1999. Each agreement specifies
the base salary to be received by the executive, and provides for annual
adjustment of the base salary by the CEO, with the approval of the Compensation
Committee, provided that the annual increase must be at least 5%. In addition,
each executive is entitled to annual bonuses in the range of 0% to 60% of his
base salary, subject to the attainment of certain performance objectives
established by the CEO with the approval of the Compensation Committee. The
amount of the bonus is determined at the discretion of the Compensation
Committee. If the annual goals set by the Compensation Committee are achieved,
the target bonus is 40% of the executive's base salary. If TCG terminates the
executive's employment without Cause or if, following a Change in Control, the
executive gives TCG at least six months notice that he is terminating
employment, then the executive is entitled to receive (i) annual payments equal
to his base salary, plus an annual bonus equal to no less than 30% of his base
salary, plus benefits, through the end of the term of the agreement, but for no
less than six months and (ii) continued employment service credit, for the
remaining term of the employment agreement, for purposes of vesting under all
forms of deferred compensation and long-term incentive plans. The executive may
be terminated for Cause if he materially breaches his employment agreement by
acting or willfully failing to act with results that are materially and
demonstrably injurious to the business of TCG. With certain exceptions, a Change
in Control is deemed to occur if there is a direct or indirect transfer of 50%
or more of the legal or beneficial ownership of stock of TCG, in one or more
transactions,
12
<PAGE>
to any entity other than to any of TCI, CEI, Comcast or Continental or any of
their controlled subsidiaries. Each agreement provides that during the six-month
period following his termination for any reason, the executive shall have the
right to require TCG to purchase from him any stock of TCG that he owns, at the
then appraised value or, if he terminates on or after July 1 of any year, at the
appraised value as of the following December 31. Each executive has agreed not
to compete with TCG during the term of his employment or while he is receiving
the severance benefits described above.
EMPLOYMENT AGREEMENTS WITH AT&T
On January 8, 1998, TCG entered into an Agreement and Plan of Merger (the
"AT&T Merger Agreement") with AT&T Corp. ("AT&T") and TA Merger Corp., a
wholly-owned subsidiary of AT&T ("AT&T Merger Sub"), pursuant to which, subject
to satisfaction of the closing conditions specified therein, AT&T Merger Sub
would merge with and into TCG, with TCG surviving as a wholly-owned subsidiary
of AT&T (the "AT&T Merger"). It is currently anticipated that Mr. Annunziata
will continue as President and Chief Executive Officer of TCG, and that the
other executive officers, including Messrs. Scarpati, Hansen, Mencher, Atkinson
and Gross, will continue in their respective capacities with TCG after the AT&T
Merger. Each of Messrs. Annunziata, Scarpati, Hansen, Mencher, Atkinson and
Gross has entered into an employment agreement with AT&T, dated as of January 8,
1998 (as did certain other executive officers of TCG). Each such agreement
commences as of the effective date of the AT&T Merger. The AT&T Merger is
conditioned upon the agreements with each of Messrs. Annunziata, Scarpati and
Hansen being in full force and effect and each being employed thereunder as of
the effective date of the AT&T Merger, subject to their death or disability.
The terms of each of the employment agreements for Messrs. Annunziata,
Scarpati, Hansen, Mencher, Atkinson, and Gross are substantially identical. The
terms of the employment agreements of Messrs. Annunziata and Scarpati expire on
the fourth anniversary of the effective date of the AT&T Merger, and the
employment agreements of Messrs. Atkinson, Hansen, Mencher and Gross expire on
the third anniversary of the effective date of the AT&T Merger. Each agreement
specifies the annual base salary to be received by the executive, and provides
for annual adjustment of the annual base salary by AT&T's compensation
committee, provided that the annual increase must be at least 5%. In addition,
each executive is entitled to annual bonuses and stock options. The executives
will also be granted upon the effective date of the AT&T Merger restricted
performance shares/units under the AT&T long term incentive plan. Upon the
effective date of the AT&T Merger, Mr. Annunziata will be granted restricted
shares of AT&T common stock or restricted phantom share units, which will vest
on the last day of his employment term. Each of Messrs. Annunziata, Scarpati,
Hansen, Mencher, Atkinson and Gross are entitled to special supplemental pension
benefits which will vest on the last day of the employment term, and the amount
therein generally will be payable to the executive following the later of the
executive's (i) termination of employment, or (ii) attainment of age 55. Each
executive has agreed not to compete with AT&T during the term of his employment
and for the two-year period following the termination of his employment.
PROPOSAL TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Deloitte & Touche LLP to audit the books and accounts of the Company
and its subsidiaries for the fiscal year ended December 31, 1998, and is seeking
the ratification of this appointment by the stockholders.
A partner of Deloitte & Touche LLP is expected to be present at the Meeting
with the opportunity to make a statement if he or she so desires to do so, and
is expected to be available to respond to appropriate questions.
13
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table provides information, as of March 23, 1998, with respect
to the beneficial ownership of TCG Common Stock by (i) each person known by TCG
to be the beneficial owner of more than 5% of any class of TCG's voting
securities, (ii) each director, TCG's President and Chief Executive Officer and
the four most highly compensated other executive officers and (iii) all
directors and executive officers as a group. Except as otherwise indicated, the
address of each holder is the same as TCG. Each holder has sole voting and
investment power with respect to all shares of stock listed as owned by such
person.
<TABLE>
<CAPTION>
CLASS A COMMON CLASS B COMMON
STOCK OWNED AND STOCK OWNED AND PERCENT OF VOTE OF
PERCENT OF PERCENT OF ALL CLASSES OF
NAME CLASS CLASS COMMON STOCK
- ---------------------------------------------------- --------------- --------------- -------------------
<S> <C> <C> <C>
Cox(1)(2)........................................... -- 39,087,594( 4%) 32.7
TCI(3)(2)........................................... 1,011,528(1 6%) 48,779,388( 0%) 40.9
Comcast(4)(2)....................................... -- 25,622,058( 6%) 21.4
The Equitable Companies Incorporated(5)............. 5,644,983(9 2%) -- **
FMR Corp.(6)........................................ 5,322,130(8 6%) -- **
Robert Annunziata................................... 239,907(**) -- **
John A. Scarpati.................................... 93,264(**) -- **
Stuart A. Mencher................................... 66,341(**) -- **
Joel D. Gross....................................... 86,862(**) -- **
Alf T. Hansen....................................... 102,013(**) -- **
James O. Robbins.................................... 4,700(**) -- **
John R. Alchin -- -- **
John R. Dillon...................................... 3,500(**) -- **
Gerald W. Gaines.................................... 3,000(**) -- **
Lawrence S. Smith -- -- **
Larry E. Romrell -- -- **
David M. Woodrow.................................... 1,500(**) -- **
James Bruce Llewellyn............................... 5,582(**) -- **
C.B. Rogers, Jr..................................... 10,582(**) -- **
Jimmy W. Hayes...................................... 1,100(**) -- **
Bernard W. Schotters--.............................. -- -- **
Executive Officers and Directors, as group(7)....... 1,011,088(1 6%) -- **
</TABLE>
- ------------------------
** Represents less than one percent of the vote of all classes of Common Stock.
(1) Owned by Cox Teleport Partners, Inc., a wholly-owned subsidiary of Cox, a
subsidiary of CEI. The business address for Cox Teleport Partners, Inc. is
1400 Lake Hearn Drive, Atlanta, Georgia 30319. The information contained in
this table with respect to Cox is based on a joint filing on Schedule 13D
reporting ownership as of July 17, 1996, by Cox, TCI, Comcast, Continental
and certain control persons of such entities (the "Joint 13D"). The Joint
13D was amended by Cox, TCI and Comcast on January 28, 1998.
(2) Solely as a result of the agreement of the Cable Stockholders to vote in
favor of the others' director nominees under the Amended Stockholders'
Agreement, the Cable Stockholders may be deemed to share beneficial
ownership of the shares beneficially owned by each of them.
(3) Owned by TCI Teleport, Inc., a wholly-owned subsidiary of TCI. The business
address of TCI is 5619 DTC Parkway, Englewood, Colorado 80111-3000. The
information contained in this table with respect to TCI is based on the
Joint 13D.
14
<PAGE>
(4) Owned by Comcast Teleport, Inc. and Comcast Communications Properties, Inc.,
two wholly-owned subsidiaries of Comcast. The business address of Comcast is
1500 Market Street, Philadelphia, Pennsylvania 19102-2148. The information
contained in this table with respect to Comcast is based on the Joint 13D,
as amended separately by Comcast on October 22, 1996, December 23, 1996, May
12, 1997 and October 27, 1997. See footnote (1).
(5) The business address for The Equitable Companies Incorporated is 1290 Avenue
of the Americas, New York, New York 10104. The information contained in this
table with respect to The Equitable Companies Incorporated is based on a
Schedule 13G/A jointly filed by the Mutuelles AXA, AXA-UAP, The Equitable
Companies Incorporated, and their subsidiaries on February 17, 1998.
(6) The business address for FMR Corp. is 82 Devonshire Street, Boston,
Massachusetts 02109. The information contained in this table with respect to
FMR Corp. is based on a Schedule 13G filed on February 14, 1998.
(7) Includes 709,791 shares of TCG Class A Common Stock subject to stock options
exercisable within 60 days. Excludes all shares of TCG Common Stock held by
the Cable Stockholders including shares of TCG Common Stock that may be
deemed to be indirectly owned by a director of TCG who is also an executive
officer or director of one of the Cable Stockholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors and
persons who own more than 10% of the Company's Class A Common Stock to file
reports of ownership and changes in ownership of the Company's Class A Common
Stock with the Securities and Exchange Commission ("SEC"). Based solely on a
review of copies of such reports and written representations from such reporting
persons, the Company believes that through the date of this Proxy Statement, its
executive officers, directors and greater than ten percent stockholders filed on
a timely basis all reports due under Section 16(a) of the Exchange Act, except
that one late report covering one transaction was filed by each of Messrs.
Atkinson, Gaines, Hayes, and Hockemeier and Ms. Gewirtzman. In addition, one
late filing was made on behalf of each of Messrs. Annunziata, Atkinson, Fox,
Scarpati, Thomson and Wingfield and Ms. Terranova-Evans in connection with an
exempt payment under the Company's Unit Appreciation Plan based upon outside
counsel's interpretation that later reporting was permitted.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
1997 EQUITY OFFERING. On November 13, 1997, TCG consummated an equity
offering. Of the 17,250,000 shares of TCG Class A Common Stock offered,
7,304,408 shares were offered by TCG and 9,945,592 shares were offered by a
subsidiary of Continental Cablevision, Inc. ("Continental"). Continental
acquired its interest in TCG in May 1993. As a result of the consummation of the
1997 equity offering, Continental does not hold any shares of TCG Common Stock.
AMENDED STOCKHOLDERS' AGREEMENT. The Company and the holders of its Class B
Common Stock (the "Cable Stockholders") entered into the Amended Stockholders'
Agreement dated as of June 26, 1996 (the "Amended Stockholders' Agreement"). The
following summary description of the Amended Stockholders' Agreement does not
purport to be complete and is qualified in its entirety by reference to the text
of the Amended Stockholders' Agreement, which is filed as an exhibit to TCG's
Registration Statement on Form S-1 (Registration Nos. 333-3850 and 333-3984, as
amended). Furthermore, there can be no assurance that the Cable Stockholders
will not cause the Amended Stockholders' Agreement to be amended, modified or
terminated or cause TCG to waive any provision of the Amended Stockholders'
Agreement.
The Amended Stockholders' Agreement provides that at each annual meeting of
TCG's stockholders at which directors are elected, the holders of the TCG Class
B Common Stock will vote their shares in favor of nominees for director to be
designated as follows: (i) the holders of TCG Class B Common Stock will
designate ten nominees (with the right of a holder of TCG Class B Common Stock
to designate one or more nominees depending on the percentage of the TCG Class B
Common Stock held by it), (ii) the Board of Directors of TCG will designate by
unanimous consent the Chief Executive Officer of TCG as a nominee and (iii) the
Board of Directors with the unanimous approval of the holders of TCG Class B
15
<PAGE>
Common Stock that have the right to designate nominees for director shall
designate two individuals as nominees for director who are neither employed by
nor affiliated with TCG or any holder of TCG Class B Common Stock. Under the
Amended Stockholders' Agreement, a holder of TCG Class B Common Stock generally
is entitled to designate one director nominee for each 9% of the outstanding
shares of TCG Class B Common Stock held by it and its affiliates. Under TCG's
Amended and Restated Certificate of Incorporation or the Amended Stockholders'
Agreement, the holders of the TCG Class A Common Stock will not have the right,
as a class, to nominate any individuals for election to the Board of Directors.
The Amended Stockholders' Agreement prohibits any transfer of TCG Class B Common
Stock held by the parties thereto, unless expressly permitted under the terms
thereof. Parties to the Amended Stockholders' Agreement have certain rights of
first offer and rights of first refusal thereunder with respect to proposed
sales of the TCG Class B Common Stock.
Each holder of TCG Class B Common Stock has the right to sell all or a part
of its TCG Class B Common Stock upon receiving a bona fide offer from an
unaffiliated third party, subject to giving notice to the other holders of TCG
Class B Common Stock who have designated at least one director, which notice
shall contain an offer to sell such stock to such other holders of TCG Class B
Common Stock on the terms and conditions set forth in the offer from the third
party. Subject to certain limitations, the non-selling holders of TCG Class B
Common Stock have the right to purchase pro rata all, but not less than all, of
the TCG Class B Common Stock offered. If the non-selling holders of TCG Class B
Common Stock do not purchase all of the TCG Class B Common Stock offered, the
offering holder of TCG Class B Common Stock may sell the TCG Class B Common
Stock to the third party on the terms contained in the offer made to the other
holders of TCG Class B Common Stock. However, unless the amount of TCG Class B
Common Stock is sufficient to entitle the transferee to designate a nominee for
director under the Amended Stockholders' Agreement (i.e., the total percentage
of TCG Class B Common Stock that would be held by the transferee and certain of
its affiliates is at least nine percent) and the transferee agrees to become a
party to the Amended Stockholders' Agreement, any TCG Class B Common Stock
included in the stock being sold must be converted to TCG Class A Common Stock.
If any party desires to convert TCG Class B Common Stock to TCG Class A
Common Stock, it must first offer that stock at a market price to the other
holders of TCG Class B Common Stock who have the right to designate at least one
director. If such other holders do not elect to buy such stock, then such stock
can be converted to TCG Class A Common Stock and sold by the selling stockholder
free of restrictions under the Amended Stockholders' Agreement.
The parties to the Amended Stockholders' Agreement have demand registration
rights on the following terms: (i) such parties collectively will have the right
to make one demand per year (with any such party having the right to make such
demand), (ii) the amount which can be sold pursuant to any demand may be limited
if the managing underwriter selected by TCG with the approval of the party to
the Amended Stockholders' Agreement that has included the largest number of
shares in the registration advises TCG that marketing factors require a
limitation of the number of shares to be underwritten and (iii) if the amount
determined pursuant to clause (ii) is less than the aggregate amount which such
parties want to sell in such offering, each such party will have the right to
sell its pro rata portion of the maximum amount. The parties to the Amended
Stockholders' Agreement participating in the registration must reimburse TCG for
its out-of-pocket expenses incurred in connection with any such demand
registration.
The Amended Stockholders' Agreement will terminate when the aggregate voting
power of the TCG Class B Common Stock represents less than 30% of the aggregate
voting power of all outstanding TCG Common Stock.
EASTERN TELELOGIC CORPORATION AND COMCAST. Effective March 1, 1997, TCG
completed its previously announced acquisition of Eastern TeleLogic Corporation
("ETC") for 2,757,083 shares of TCG Class A Common Stock. ETC is the leading
competitive local exchange carrier in Philadelphia, Pennsylvania and in the
neighboring cities of Camden, New Jersey and Wilmington, Delaware. In the first
of two steps, on
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October 25, 1996, ETC redeemed shares of its stock and employee stock options
(approximately 47%) not held by Comcast CAP, a corporation owned 51% by Comcast
Corporation and 49% by TCG. Comcast CAP borrowed at a market interest rate
approximately $115 million from TCG as a short-term loan and, in turn, loaned
this amount to ETC to effect the redemption. In the second step, TCG acquired
Comcast's 51% stock interest in Comcast CAP in exchange for 2,757,083 shares of
TCG Class A Common Stock, resulting in ETC becoming a wholly-owned subsidiary of
TCG. In May 1997, Comcast transferred the 2,757,083 shares of TCG Class A Common
Stock to a third party in a private transaction. TCG also assumed an aggregate
of approximately $52.6 million of ETC debt and other obligations. The
acquisition of ETC provides TCG with access to the Philadelphia market, the
nation's fifth largest market, and allows TCG to establish a contiguous network
between Boston and Washington, D.C. ETC operates a Class 5 digital telephone
switch on its 525-mile fiber optic network which connects to more than 360
buildings. As part of the acquisition, TCG assumed the ETC's credit facility.
This facility, which ETC entered into in October 1995, is a $60 million credit
facility with certain banks. Initial borrowings under the ETC facility of $37
million were principally used to repay existing long-term debt, leases and
certain subordinated convertible demand promissory notes.
AT HOME CORPORATION. In April 1997, TCG entered into a Master
Communications Services Agreement with At Home, which is owned in part by
certain of the owners of the Cable Stockholders. The Agreement provides for both
promotional and standard pricing over a five year term and provides At Home with
the option to colocate certain of its equipment in TCG premises in which event
At Home incurs certain obligations to use TCG's services. TCG believes that the
Internet services being or to be offered by At Home may compete with services
being or to be offered by TCG through its TCG CERFnet, Inc. subsidiary. The
amount receivable from At Home at December 31, 1997 was $0.2 million.
KANSAS CITY FIBER NETWORK, L.P. In December 1997, TCG agreed to purchase
substantially all of the assets used in connection with a fiber optic
communications system of Kansas City Fiber Network L.P. ("KCFN"), a majority of
the equity of which is owned by TCI. Pending the closing of such transaction,
TCG is providing certain services in connection with the operations of such
communications system, which is located in the Kansas City Missouri/Overland
Park, Kansas metropolitan area. The purchase price is approximately $55 million
and TCG will be required to assume certain obligations of the seller.
Consummation of the purchase of the assets of KCFN is subject to the receipt of
required regulatory approvals and other related consents. Accordingly, there can
be no assurance that the purchase of the assets of KCFN will be successfully
consummated or, if successfully completed, when it might be completed.
OPERATOR MANAGED VENTURES SERVICES AGREEMENTS WITH COX. Pursuant to the
terms of three Operator Managed Ventures Services Agreements between TCG and
certain affiliates of Cox, TCG has options to acquire up to a 35% interest in
the competitive access businesses conducted by such affiliates of Cox in New
Orleans, Oklahoma City and the Hampton Roads, Virginia area, respectively. To
the extent the Cox competitive access provider has derived revenue from any
contract entered into by TCG as a result of sales efforts engaged in by TCG on
behalf of such Cox operations, the purchase price shall be the ratio of the
annual TCG generated revenue to total annual revenue of the Cox operation
multiplied by the book value of the assets of the Cox operation. If such ratio
is less than 35%, TCG may purchase the balance, up to 35%, of that Cox operation
for the fair market value (as determined in accordance with the Operator Managed
Ventures Services Agreements) of the operation. There is no cap or maximum
purchase price under the terms of the Operator Managed Ventures Services
Agreements. In November 1996 TCG notified Cox of its intention to exercise its
option to purchase a 35% interest in Cox's Hampton Roads, Virginia operations
(TCG's options to acquire 35% interests in Cox's New Orleans and Oklahoma City
operations do not mature until 1999). Cox and TCG engaged in discussions
concerning the calculation of the purchase price formula for Hampton Roads,
Virginia, and a possible renegotiation and restructuring of the respective
rights and obligations of the parties under each of the Operator Managed
Ventures Services Agreements. However, in connection with the AT&T Merger, Cox
and TCG agreed to suspend their
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negotiations and to toll the option period until the later of six months after
the effective date of the AT&T Merger and the contractual trigger date.
TCG also provides management services to certain affiliates of Cox under
these agreements, including billing services, network monitoring and accounts
receivable functions. Under the terms of the agreements, TCG retains 8% of the
collected revenues from Cox customers as a royalty fee. Royalty fees recorded
from Cox were approximately $0.6 million for the year ended 1997, and are
included in management and royalty fees from affiliates in the statement of
operations. The amount due to Cox under these agreements was $1.7 million as of
December 31, 1997. Included in accounts receivable-trade are approximately $1.0
million at December 31, 1997 for amounts owed by Cox customers. In the event of
a purchase of an interest in any of the Cox operations by TCG, the royalty fee
for such operation is reduced to 3%.
RESIDENTIAL TELEPHONY AGREEMENTS. In 1996, TCG entered into a preliminary,
short-term agreement with TCI which provided for the provision of certain
services by TCG to TCI in connection with the development by TCI of residential
telephony service offerings in Hartford, Connecticut, Fremont, California and
Arlington Heights, Illinois. TCI has agreed to reimburse TCG for certain costs
and cost of capital in connection with these services. TCI and TCG are also in
the process of negotiating market-based agreements regarding the provision of
residential telephony services in certain multiple dwelling units at various
locations. TCG has entered into agreements with Comcast to support Comcast
residential service offerings in various locations. At December 31, 1997, the
amount due to TCG for reimbursement by Cable Stockholders in respect of
residential services was $1.0 million, and are included in related parties
within the accounts receivable.
SALES OF FIBER OPTIC CABLE. In 1994, TCG entered into agreements with
providers of fiber optic cable that contained discounts for certain volumes of
purchases. The agreements permitted TCG to purchase cable on behalf of
affiliates, including minority partners in the Local Market Partnerships, and to
apply those purchases toward the volume discounts. In 1996 and 1997, TCG
purchased cable on behalf of certain of the Cable Stockholders which it then
sold to them at cost. At December 31, 1997, the amount receivable from the Cable
Stockholders was approximately $1.1 million. TCG has purchased cable on behalf
of unaffiliated parties as well.
FACILITIES ARRANGEMENTS. Affiliates of the Cable Stockholders have entered
into two types of arrangements with TCG pursuant to which fiber optic and cable
transmission facilities are made available to it. Pursuant to the terms of one
type of such arrangements, providing an indefeasible right of use, the
compensation payable by TCG is based on the affiliate's cost of construction of
such facilities, generally payable over five years. For the year ended December
31, 1997, payments, representing principal plus interest, made to TCI, Cox and
Comcast pursuant to facilities lease arrangements with TCG were approximately
$16.0 million, $17.2 million, and $7.0 million, respectively. Under the terms of
the other type of such arrangements, TCG agrees to provide, install and maintain
all customer premise and nodal electronics equipment and provide 24-hour
electronics maintenance and monitoring with respect to the cable transmission
service. The compensation payable by TCG is based on a percentage of the total
monthly recurring amount which TCG bills to its customers which are served
through such affiliate's cable transmission service. Affiliates of the Cable
Stockholders have also entered into various colocation arrangements with TCG.
Pursuant to a Voting Agreement executed in connection with the AT&T Merger
Agreement, each of the Cable Stockholders, on behalf of itself and certain of
its affiliates, also agreed that (i) certain rights-of-way, colocation and
similar agreements with TCG and its affiliates would be amended as of January 8,
1998, to provide that each such agreement would remain in effect for the longer
of five years from such date and the current term of such agreement; and (ii)
certain existing facilities agreements, facilities lease agreements or other
arrangements (including arrangements relating to future agreements) relating to
the lease or other grant of right to use fiber optic facilities between such
Cable Stockholder or any of its affiliates and TCG or any of its subsidiaries
would be automatically amended as of January 8, 1998, to
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conform with a form of Master Facilities Agreement agreed to by AT&T, the Cable
Stockholders and TCG at the time of the execution of the AT&T Merger Agreement.
Among other things, agreements amended and entered into in accordance with the
Master Facilities Agreement will, subject to the terms, conditions and
limitations of the Master Facilities Agreement, (i) grant TCG an indefeasible
right to use the facilities that are the subject of the existing facilities
agreements, and (ii) grant TCG an indefeasible right to use additional fiber
optic facilities which, subject to certain conditions, TCG may require the Cable
Stockholder or its affiliates to construct. The Master Facilities Agreement
continues to contain a provision prohibiting TCG from using the fiber optic
facilities to provide cable television signals to subscribers. In the event of
disruption or trouble with the facilities, the Cable Stockholder or its
affiliates must use best efforts to begin restoration and repair within 30
minutes of notification from TCG or such other required period under current
maintenance specifications. Each of the Cable Stockholders also agreed to, or to
cause its appropriate affiliate to, subject to certain limitations, execute an
agreement in the form of the Master Facilities Agreement in any new service
territory in which such Cable Stockholder (or affiliate) provides services or
owns or operates facilities or in any existing service territory of such Cable
Stockholder (or affiliate) for which a facilities agreement was not in place as
of January 8, 1998. These amendments became effective immediately and are not
subject to completion of the AT&T Merger.
SPRINT PCS SERVICE ARRANGEMENTS. Sprint PCS, a partnership owned 60% by
TCI, Comcast and Cox, has entered into service arrangements, preliminary
agreements or letters of intent with a number of wholly-owned subsidiaries of
TCG providing for the construction of special facilities and the provision of
services to Sprint PCS by TCG. TCG and Sprint PCS continued this service
relationship throughout 1997. The amounts receivable from Sprint PCS at December
31, 1997 was $1.6 million.
COMCAST SERVICE ARRANGEMENTS. TCG has agreed to provide Comcast certain
services on customary terms in the Philadelphia area, and Comcast has agreed to
utilize exclusively TCG's wireline telecommunications services in the
Philadelphia area, subject to certain qualifications.
TCI SUBORDINATED NOTE. In connection with TCG's reorganization in 1996, TCG
issued to TCI a subordinated note in the principal amount of $26 million, which
bore interest at the rate of 7.5% per annum with principal and interest payable
in one installment on June 26, 2001. This note was repaid at a discount in
December 1997.
TCG believes that the terms, taken as a whole, of the transactions under the
headings "1997 Equity Offering," "Eastern TeleLogic Corporation and Comcast,"
"At Home Corporation," "Kansas City Fiber Network, L.P.," "Operator Managed
Ventures Services Agreements with Cox," "Residential Telephony Agreements,"
"Sales of Fiber Optic Cable," "Facilities Arrangements", "Sprint PCS Service
Arrangements", "Comcast Service Arrangements" and "TCI Subordinated Note" were
no less favorable to TCG than could have been obtained from unaffiliated
parties.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters which may
come before the Meeting. However, if any matters other than those referred to
above should properly come before the Meeting, it is the intention of the
persons named in the enclosed Proxy to vote such proxy in accordance with their
discretion.
By order of the Board of Directors
[LOGO]
John W. Thomson
VICE PRESIDENT AND SECRETARY
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TELEPORT COMMUNICATIONS GROUP INC.
CLASS A COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS - MAY 13, 1998
The undersigned hereby appoints John W. Thomson, W. Terrell Wingfield and
John A. Scarpati and each of them, with full power of substitution for and in
the name of the undersigned, to vote all Class A Common Stock, par value $.01
per share, of Teleport Communications Group Inc., a Delaware corporation, that
the undersigned would be entitled to vote if personally present at the 1998
Annual Meeting of Stockholders to be held at the Villas of Grand Cypress,
Executive Meeting Center, One North Jacaranda, Orlando, Florida on Wednesday,
May 13, 1998 at 1:30 p.m., local time, and at any adjournment thereof, upon the
matters described in the accompanying Notice of Annual Meeting of Stockholders
and Proxy Statement, receipt of which is hereby acknowledged, subject to any
direction indicated on the reverse side of this card, and upon any other
business that may properly come before the meeting or any adjournment thereof,
hereby revoking any proxy heretofore executed by the undersigned to vote at said
meeting.
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF TELEPORT
COMMUNICATIONS GROUP INC. THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE.
TELEPORT COMMUNICATIONS GROUP INC.
P.O. BOX 11390
NEW YORK, N.Y. 10203-0390
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
<TABLE>
<S> <C> <C> <C>
1.Election of Directors FOR all nominees /X/ WITHHOLD authority to vote /X/ *EXCEPTIONS /X/
listed below for all nominees listed below
</TABLE>
Nominees: John R. Alchin, Robert Annunziata, John R. Dillon, Gerald W. Gaines,
Jimmy W. Hayes, Gary S. Howard, James Bruce Llewellyn, James O. Robbins, C.B.
Rogers, Larry E. Romrell, Lawrence S. Smith, Bernard W. Schotters, David M.
Woodrow.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEEOS NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions____________________________________________________
2.Ratification of appointment of Deloitte & Touche LLP as the Corporation's
independent auditors for the year ending December 31, 1998.
FOR /X/ AGAINST /X/ ABSTAIN /X/
CHANGE OF ADDRESS AND
OR COMMENTS MARK HERE /X/
NOTE: Please date and sign this proxy exactly as your name appears hereon. In
case of joint owners, each joint owner should sign. When signing in a fiduciary
or representative capacity, please give your full title. If the proxy is
submitted by a corporation or partnership, it should be executed in the full
corporation or partnership name by a duly authorized person.
Dated: _____________________,1998
_________________________________
Signature
_________________________________
Signature
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. /X/
(PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED POSTAGE PREPAID
ENVELOPE PROMPTLY.)
